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# Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies and Programs into State and Tribal Implementation Plans1 EPA

- 456/D

- 12

- 001a

Ju ly 201 2

Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies and Programs into State and Tribal Implementation Plans

By: U.S. Environmental Protection Agency Office of Air Quality Planning and Standards
Outreach and Information Division Research Triangle Park, North Carolina

U.S. Environmental Protection Agency Office of Air Quality Planning and Standards
Outreach and Information Division Research Triangle Park, North Carolina2 

### ACKNOWLEDGMENTS
We would like to acknowledge substantial contributions from members of an inter

office EPA team that included the Office of Atmospheric Programs, the Office of Policy Analysis and Review

, the Office of General Counsel and Regions 1 and 6. Th is document
also reflects comments received from a number of stakeholders, including state and
local air quality agencies.3



### TABLE OF CONTENTS

APPENDICES

................................ ................................ ................................ ................................ .................... 4

FIGURES

................................ ................................ ................................ ................................ .......................... 5

TABLES

................................ ................................ ................................ ................................ ............................ 6

ACRONYMS

................................ ................................ ................................ ................................ ..................... 7

EXECUTIVE SUMMARY

................................ ................................ ................................ ................................ .... 9

Purpose of the Roadmap

................................ ................................ ................................ ............................ 9

The Four Pathways

................................ ................................ ................................ ................................ ..... 9

SECTION 1.0: PURPOSE AND ROADMAP ORGANIZATION

................................ ................................ ........... 11
Energy Efficiency/Renewable Energy Policies and Programs as Cost

- Effective Strategies

..................... 12
Four Reasons to Take Advantage of Energy Efficiency/Renewable Energy Policies and Programs in Air
Plans

................................ ................................ ................................ ................................ ......................... 12

Four Pathways Available

................................ ................................ ................................ ........................... 14
Challenges of Incorporating Energy Efficiency/Renew able Energy Policies and Programs in State and Tribal Implementation Plans

................................ ................................ ................................ .................... 15

This Roadmap Clarifies Existing Guidance and i s Not a Regulation

................................ .......................... 16

Scope of Roadmap

................................ ................................ ................................ ................................ .... 16

SECTION 2.0: ACTIVITIES FOR GETTING STARTED

................................ ................................ ........................ 19

Functioning of the Electric System

................................ ................................ ................................ ........... 19

Roles and Responsibilities of Key State Electric Energy Organizations

................................ .................... 19
State, Tribal and Local Energy Efficiency/Renewable Energy Policies and Programs in Jurisdictions

...... 20

Estimating Potential Emission Reductions

................................ ................................ ............................... 21

Understanding Existing EPA Energy Efficie ncy/Renewable Energy SIP Guidance

................................ .... 21

Common “Getting Started” Questions and Answers

................................ ................................ ............... 21

SECTION 3.0: DECISION

- MAKING FOR NAVIGATING THE FOUR PATHWAYS

................................ ............... 27

Decision

- Making Flowchart

................................ ................................ ................................ ...................... 27
Pathways for Jurisdictions That Have Emerging and/or Voluntary Measures

................................ ......... 28
Pathways for Jurisdictions That Do Not Have Emerging and/or Voluntary Measures

............................. 28

Additional Resources

................................ ................................ ................................ ................................ 29

SECTI ON 4.0: BASELINE EMISSIONS PROJECTION PATHWAY

................................ ................................ ...... 33

Qualifying Criteria

................................ ................................ ................................ ................................ ..... 34

Mandatory Policies That Are Not Federally Enforceable

................................ ................................ .......... 34

SECTION 5.0: CONTROL STRATEGY PATHWAY

................................ ................................ ............................. 35

Control Strategy Pathway Must Meet Four Criteria

................................ ................................ ................. 35

SECTI ON 6.0: EMERGING/VOLUNTARY MEASURES PATHWAY

................................ ................................ ... 37

SECTION 7.0: WEIGHT OF EVIDENCE PATHWAY

................................ ................................ .......................... 39

REFERENCES

................................ ................................ ................................ ................................ ................. 414



### APPENDICES
Appendix A: Glossary

................................ ................................ ................................ ................................ ... A

- 1 Appendix B: Overview of the U.S. Electric System

................................ ................................ ..................... B

- 1 Appendix C: Existing EPA Energy Efficiency/Renewable Energy Guidance

................................ ................ C

- 1 Appendix D: Understanding State Energy Efficiency and Renewable Energy Policies and Programs

................................ ................................ ................................ . D

- 1 Appendix E: Baseline Emissions Projection Pathway

................................ ................................ ................... E

- 1 Appendix F: Control Strategy Pathway

................................ ................................ ................................ ......... F

- 1 Appendix G: Emergin g/Voluntary Measures Pathway

................................ ................................ ................ G

- 1 Appendix H: Weight of Evidence Pathway

................................ ................................ ................................ .. H

- 1 Appendix I: Methods for Quantifying Energy Efficiency and Renewable Energy Emission Reductions

...... I

- 1 Appendix J: Draft Methodology for EP A ’s Analysis of Existing State Energy Effici ency/Renewable Energy
Policies

................................ ................................ ................................ ................................ ......................... J

- 1 Appendix K: State, Tribal and Local Examples and Opportunities

................................ ............................. K

- 15



### FIGURES

Figure 1: Organ ization of the Roadmap

................................ ................................ ................................ ....... 11 Figure 2: Electric Energy Efficiency Program Budgets

................................ ................................ .................. 13 Figure 3: Growth in State Policies for Renewable Portfolio Standards

................................ ........................ 14 Figure 4: How the Appendices Support the Four Pathways

................................ ................................ ........ 18 Figure 5: Energy Efficiency/Renewable Energy Pathway Flowchart for State and Tribal Implementation
Plans

................................ ................................ ................................ ................................ ............................. 22 Figure 6: Energy Organizations’ Roles and Responsibilities

................................ ................................ ......... 23 Figure 7 : Characteristics of Policies and Programs Suitable for Each Pathway

................................ ............ 30 Figure 8: Four Criteria the Control Strategy Pathway Must Meet

................................ ............................... 366



### TABLES
Table 1: Common “Getting Started” Questions and Answers

................................ ................................ ..... 24 Table 2: Examples of Energy Efficiency/Renewable Energy Policies and Programs for the Four State and Tribal Air Planning Pathways

................................ ................................ ................................ ........................ 31 Table 3: Information on State and Tribal Implementation Plan Credit and Quantification Approaches

.... 327



### ACRONYMS AAGR: Annual Average Growth Rate AEO: Annual Energy Outlook ARRA: American Recovery and Reinvestment Act

CAA: Clean Air Act CFEC: Capacity Factor Emission Calculator
CHP: Combined Heat and Power

CO: C arbon M onoxide

CO 2 : C arbon D ioxide DEP: Department of Environmental Protection EE: Energy E fficiency EERS: Energy Efficiency Resource Standard

eGRID: Emissions & Generation Resource Integrated Database EGU: Electric Generating Unit EIA: Energy Information Administration EIP: Economic Incentive Program EM&V: Evaluation, M easurement and V erification EMM: Electricity Market Module GWhs: Gigawatt Hours HEDO: High Electric Demand Days Hg: M ercury IPM: Integrated Planning Model ISO: Independent System Operator

KW h: Kilowatt

- Hour MW: Megawatt MWh: Megawatt

- H our NAAQS: National Ambient Air Quality Standard NEEDS: National Electric Energy Data System NEMS: National Energy Modeling System
NERC: North American Electric Reliability Corporation
Pb: L ead
PM: Particulate Matter PUC: Public Utility Commission
RE: Renewable E nergy RFP: Reasonable Further Progress RGGI: Regional Greenhouse Gas Init i ative
RPS: Renewable Portfolio Standard RTO: Regional Transmission Organization SEO: State Energy Office

SIP: State I mplementation P lan

SO 2 : Sulfur Dioxide
TIP: Tribal I mplementation P lan WOE: Weight of E vidence
ACEEE: American Council for an Energy

- Efficient Economy8

LCSE: Levelized Costs of Saved Energy9



### EXECUTIVE SUMMARY

The U.S. Environmental Protection Agency’s ( EPA’s ) Office of Air and Radiation

encourage s state, tribal and local agencies to consider incorporating energy efficiency (EE) and renewable energy (RE) policies and programs in their State and Tribal Implementation Plans (SIPs/TIPs)

. State and local governments have increased their adoption of EE/RE policies and programs since EPA last issued guidance on th e topic in

2004 . This increase in activity has the potential to provide appreciable emi ssion benefits for air quality that state, tribal and local air planners could capture in SIPs/TIPs. As EPA continues to review and, as appropriate

, revise National Ambient Air Quality Standards (NAAQS) to protect public health , emission reductions from E E/RE policies and programs may become increasingly important for jurisdictions designated as nonattainment. The goal of this document is to facilitate the use of EE/RE emissions reduction strategies in air quality plans. This is made possible by the abun dance of i nformation available on the energy impacts of EE/RE policies and programs and by the availability of the SIP/TIP pathway decision

- making framework provided here in this roadmap.



### Purpose of the Roadmap The EPA is issuing this roadmap to reduce the barriers for state, tribal and local agencies to incorporate EE/RE policies and programs in SIPs/TIPs by clarifying existing EPA guidance and providing new and detailed information. The roadmap provides a sect ion on “getting started” that includes charts and tables for decision

- makers to consider in weighing which pathway or pathways to pursue for incorporating EE/RE policies and programs in SIPs/TIPs. The charts and tables also describe the advantages and
dis advantages of each pathway. Attached to the roadmap are detailed appendices that include new information. A range of topics is covered from basic information on understanding the electric system and EE/RE policies and programs to details on four
differen t approaches for quantifying EE/RE benefits. The appendices also provide basic information on each pathway, including SIP/TIP documentation.



### The Four Pathways The roadmap describes the four SIP/TIP pathways that are available to state, tribal and local ag encies as they consider which approach to adopt for incorporating policies and programs in SIPs/TIPs. The four pathways describ ed in the roadmap are:

1. Baseline emissions projection pathway;

2. C ontrol strategy pathway ; 3. Emerging/voluntary measures pathway ; and

4. Weight of evidence (WOE) determination pathway

.

State, tribal and local agencies can, of course, select more than one pathway for their jurisdiction’s different EE/RE policies and programs. Each option is appropriate for a specific set of circumstances and has its own documentation and analytical provisions. For example, t he baseline emissions projection pathway is an option for agencies that have already adopted EE/RE policies and programs that they wish to incorporate in their10

emissions forecast. Alternatively, if the jurisdiction is contemplating adopting new EE/RE policies before it submits its SIP/TIP to EPA , then the control strategy pathway is an option. In cases where jurisdictions have adopted emerging and/or voluntary measures ( i.e., those that are difficult to enforce and/or quantify), the emerging/voluntary measures pathway may be the preferred route

. The WOE pathway is a supplemental analysis to an attainment demonstration in cases where a jurisdiction is not predicted to att ain an air quality standard based on air quality modeling; it is a recommended option for accounting for EE/RE policies and programs where a state,
tribal or local agency wants to claim emissions benefit that will potentially affect air quality in the atta inment year , but where modeling the impact s of the policy or program
is eith er too resource intensive or not feasible for other reasons and/or the jurisdiction
is not interested in SIP /TIP credit

.11



### SECTION 1.0: PURPOSE AND ROADMAP ORGANIZATION

T his document provides a roadmap to assist state, tribal and local agencies with accounting for and incorporating energy efficiency and renewable energy (EE/RE) policies and programs in State Implementation Plans (SIPs) and

T ribal I mplementation P lans 1
(TIPs). The roadmap accomplishes this task by clarifying guidance 2 the U.S.
Environmental Protection Agency (EPA) issued in 2004 on incorporating EE/RE policies and programs into SIPs, as well as related guidance 3 EPA issued in that year and in 2005.

States are required

, under the Clean Air Act (CAA), to submit SIPs when an area is designated

as nonatta inment for a National
Ambient Air Quality Standard (NAAQS). The EPA is then required to either approve or disapprove the SIP/TIP, based on whether the plan meets the requirements o f the CAA

. EE/RE policies and programs are increasingly being explored by state, tribal and local agencies for use in meet ing air quality goals and

SIP / TIP requirements (i.e., emission reductions needed to demonstrate attainment and/or satisfy other CAA requirements). 4

To help state, tribal and local air quality planners start, the main body of this roadmap provides several resources, is designed to be user friendly and is intentionally brief. The
detailed a ppendices describe the electric system mechanics, emission quantification

1 The C lean Air Act provide s authority for t ribes to implement CAA programs and instructed EPA to adopt regulations so that eligible Tribes may manage their own EPA

- approved air pollution control p rograms under the CAA. The 1998 Tribal Authority Rule (TAR) implements the provisions of section 301(d) of the CAA to authorize eligible Tribes to develop their own tribal programs. Under the TAR, a Tribe may be approved by EPA to be eligible to be treated in the same manne r as a s tate for one or more CAA programs. Such a program may include, but is not limited to, a TIP. Tribal governments are not required to submit a TIP, nor are they subject to deadlines mandated under the CAA. Ho w ever, EPA must meet its obligations with respect to tribal lands under the CAA.

2 EPA (20 04a).

3 EPA (2004b) and EPA (2005).

4 The other requirements include: Reasonable Furt her Progress and Reasonabl y Available Control Technology/Reasonabl y Available Control Measures. Figure 1 : Organization of the Roadmap12

approaches and detailed provisions for inc orporating EE/RE policies and programs in the four SIP pathways. References to outside sources are also provided. 5 Figure 1 provides the overall organization of the roadmap. Figure 4 describes each appendix and its applicability to each of the four path ways.



### E nergy Efficiency /R enewable Energy Policies and Programs as Cost

Effective Strategies EE/RE policies and programs (as described in Section 2.0) offer the potential to achieve
emission reductions at a cost that can be lower than traditional control measures. The EPA is gaining experience with these potentially cost

- effective strategies i n rulemakings affecting the utility and other sectors

. 6 The EPA is working to define how and when EE/RE policies can lower the overall cost of a chieving compliance with the requirements
of emissions standards.

EE/RE policies and programs may be a cost

- effective strategy that state, triba l and local agencies can use as part of multi

- pollutant emissions reduction approaches to help attain and maintain compliance with NAAQS, as well as achieve other regulatory or non

regulatory objectives such as improving visibility, reducing regional haze, reducing air toxics, and li miting greenhouse gases.



### Four Reasons to Take Advantage of E nergy Efficiency /R enewable Energy Policies and Programs in Air Plans EE/RE policies and programs represent a real opportunity for improving air quality. The EPA encourages state, tribal and loca l air quality planners to quantify and take advantage of the emission benefits of EE/RE policies and programs

. Over the past 10
years, state s have made substantial investments in EE/RE initiatives and are seeing significant increases in EE savings and ren ewable generation as a result. These commitments have the potential to provide appreciable emission benefits for air quality that state, tribal and local air planners could capture in SIPs/TIPs.

Four reasons for state, tribal and local agencies to cons ider EE/RE policies and programs
in SIPs and TIPs are:

1) From 2006 to 20 1 1 , states have increased their budget investments in electric EE programs significantly , committing over $ 5 billion of ratepayer resources in 20 1 1

to electric EE programs. (See Fig ure 2 for growth in state EE expenditures from

5 For links to sources external to EPA, note that EPA cannot attest to the accuracy of non

- EPA information provided by these third

- party sites or any other linked site. The EPA provid es these links as a reference. In doing so, EPA does not endorse any non

- government websites, companies or applications.

6 For example, a recent EPA modeling scenario for EPA’s Mercury and Air Toxics Standard rule predicts that moderate levels of energy

- demand reduction

– equivalent to the continuation of current policies

– could lower total compliance costs, reduce ratepayer bills over the long term, and in some cases, delay or avoid the need for equipment upgrades or new construction of generating facilities and emissions
controls. This energy

- demand reduction is also likely to reduce emissions of air pollutants on high
elec tricity demand days when air quality can be especially harmful (Federal Register 2011a).13 2006

- 20 11 .) 7 Additionally, nearly all states (4 8 ) have EE programs reporting efficiency program budgets. 8

2) As of 2011

, twenty

- nine states ( and Washington, DC ) had adopted renewable portfolio standard s (RPS) which require retail electricity providers to supply a minimum percentage or amount of retail demand with renewable resources

, more than double the number of states in 2000 (see Figure 3 ). 9
3) As EPA periodically revie w s NAAQS to strengthen public heal th protection , the
need for state, tribal and local agencies to find greater emission reductions may well continue. E E/RE policies and programs can provide a resource to help meet
that need. 4) I nformation about the energy impacts of EE/RE policies and programs and their resulting emission benefits is now more widely available . State, tribal and local agencies do not have to start analyses from scratch , but can access existing, quality data . ( Refer to Appendix D for a list of resources.)

7 For more information, go to: http://www.cee1.org/ee

- pe/2011AIR.php3

. 8 ACEEE (2012), Appendix A.

9 For more information, go to: http://www.cleanenergystates.org/assets/Uploads/2011

- RPS

- Summit

Combined

- Presentations

- File.pdf Source: http://www.cee1.org/ee

- pe/201 1 AIR.php3 Figure 2 : Electric Energy Efficiency Program Budgets14



### Four Pathways Available The EPA recognizes that state, tribal and local agencies interested in incorporating these policies and programs in SIPs/TIPs may need more detailed information on how to
achieve th is goal. To tha t end, this manual provides a roadmap for understanding the
parameters and other aspects of the four pathways available for incorporating EE/RE policies and programs in SIPs/TIPs

. State, tribal and local agencies can, of course, select
more than one pathway for their jurisdiction’s different EE/RE policies and programs. The pathways are :

1. Baseline emissions projection pathway : This is an option for agencies that have already adopted EE/RE policies and programs and they wish to incorporate the impac t of those policies and programs in their SIP/TIP forecast of emissions for the electric generating units (EGUs).

2. Control strategy pathway: I f a jurisdiction is contemplating adopting new EE/RE policies before it submits its SIP/TIP to EPA , then the contr ol strategy pathway is an option. EE/RE policies incorporated in a SIP/TIP as a control strategy must be quantifiable, surplus, enforceable and permanent.

3. Emerging/voluntary measures pathway : In cases where jurisdictions have adopted emerging and/or voluntary EE/RE measures (i.e., those that are difficult to enforce and/or quantify), the emerging/voluntary measures pathway is the preferred route

. 4. Weight of evidence (WOE) determination pathwa y: The WOE pathway is a supplemental analysis to an attainm ent demonstration in cases where a jurisdiction is not predicted to attain an air quality standard based on air quality Source: http://www.cleanenergystates.org/assets/Uploads/2011

- RPS

- Summit

- C ombined

- Presentations

- File.pdf

Figure 3 : Growth in State Policies for Renewable Portfolio Standards15 modeling; it is a recommended option for accounting for EE/RE policies and

programs where a state, tribal or local agency wants to claim emissions benefit that will potentially affect air quality in the attainment year , but where modeling the impact s of the policy or program is eith er too resource intensive or not
feasible for other reasons and/or the jurisdiction is not interested in SIP / TIP
credit

.

Each pathway is appropriate for a specific set of circumstances and has its own documentation and analytical provisions.



### Challenges of Incorporating Energy Efficiency/Renewable Energy Policies and Programs in State and Tribal Implementation Plans In addition to the advantages, the EPA also recognizes the challenges associated with incorporating EE/RE policies and programs in SIPs, including:

Establishing partnerships between air and energy regulators in jurisdictions
Quantif ying the emissions and air quality benefits of EE/RE policies and programs

One challenge is establishing strong, productive partnerships among energy and environmental agencies within state, tribal or local governments

. In many jurisdictions,

environment al agencies have not traditionally partnered with public utility commissions (PUCs) and state energy offices (SEOs). Collaborating with PUCs and SEOs can help all parties understand the details of relevant EE/RE policies and how the associated
emission be nefits can help an area attain one or more NAAQS. Greater collaboration may help with the transfer of energy information that is needed for SIP/TIP documentation from energy to air agencies. Partnerships among state air and energy
offices can facilitate successful monitor ing of compliance with adopted EE/RE policies and evaluation of their impacts; this will ensur e that projected energy and emission
benefits are achieved

.

The EPA also recognizes that quantifying the emission impacts of EE/RE policies an d programs in a manner acceptable for SIPs/TIPs can be challenging, especially in cases where air agencies need to determine whether and to what extent the EE/RE initiative is affecting a particular nonattainment area. Appendix I of the roadmap describes emission quantification approaches state, tribal and local agencies can apply to understand the magnitude and location of EE/RE policy and program emission impacts. Depending upon the emission quantification approach used, emission reductions can be

attri buted to specific EGUs within (or upwind of) a nonattainment area.

O ne of the key issues is to identify where and when the emission reductions need to occur to reduce harmful air quality levels for a particular NAAQS in a particular area

. For
criteria pollutants like sulfur dioxide (SO 2 ) and primary particulate matter (PM),
reductions in electricity demand from a fossil fuel

- fired EGU can produce air quality improvements in the area around the EGU i n a short er time frame. For other criteria16

pollutants, like ozone or secondary PM , the air quality improvements from EE/RE policies and programs would occur at a larger regional scale and over a longer period since these pollutants form in the atmosphere over a greater period of time and at a
great er distance from the pollution source

.

Air agencies should evaluate the effectiveness of an EE/RE policy or program on achieving benefits to air quality within a nonattainment area. This can depend upon the form of the NAAQS

– that is, short

- term versu s long

- term concern

– and on local impacts versus long distance concerns. To address these challenges, in Appendix I, EPA describes four emission quantification approaches for EE/RE policies and programs. These approaches encompass a range of techniques t hat can be used to support the four SIP pathways. In addition, the appendix addresses pertinent analytical questions, as well as a description of the advantages and disadvantages of each approach.



### This Roadmap Clarifies Existing Guidance and i s Not a Regu lation
This roadmap is being issued to clarify existing guidance and does not create new guidance. In addition, the C AA and implementing regulations at the Code of Federal Register, Title 40, Part 51: R equirements for Preparation, Adoption, and Submittal of Implementation Plans ( 40 CFR Part 51 ) contain legally binding requirements. This roadmap does not substitute for those provisions or regulations, nor is it a regulation itself. Thus, it does not impose binding, enforceable requirements on any party, and may not be applicable in all situations.

The EPA and state, tribal and local agency decision makers retain the discretion to adopt approaches for approval of SIPs/TIPs that differ from this guidance where appropriate and consistent with applicable law. Any final decisions made by EPA on a submitted
revision for a partic ular SIP will be made based on the statute and regulations within the
context of EPA notice and comment rulemaking. Therefore, interested parties may raise questions and objections about the substance of this roadmap and appropriateness of its application to a particular situation. The EPA will, and state, tribal and local agencies
should similarly , consider whether the recommendations in the roadmap are appropriate in a particular situation.

This roadmap is a livin g document and may be revised periodically without public notice. However, the EPA welcomes public comments on this document at any time and will consider those comments in any future revision of this document. Finally, this document does not prejudice a ny future final EPA decision regarding approval of any

SIP , which will only be completed through notice and comment rulemaking

. 

### Scope of Roadmap

Th e roadmap described in this document pertains only to the impact of EE/RE policies and program s on air emiss ions from the electric utility sector , which is a major stationary source of emissions contributing to ozone, SO 2 and PM 2.5 air quality levels.17

O ther source sectors, especially mobile sources, 10 can also contribute to ambient levels of these pollutants. In addressing nonattainment air quality problems, state, tribal and local agencies will need to consider emission reductions from more than the utility

sector.

10 EPA (1997).18 Figure 4 : How the Appendices Support the Four Pathways19



### SECTION 2.0: ACTIVITIES FOR GETTING STARTED

The purpose of this section is to help state, tribal and local agencies understand what activities EPA recommends agencies consider when deciding whether to incorporate EE/RE policies and programs in a SIP /TIP

. T he EE/RE SIP Pathway Flow c hart (Figure 5 ) recommends initially that agencies become familiar with :

Basic functioning of t he electric system

R oles and responsibilities of key state energy

- related organizations State, tribal and local EE/RE policies and programs in the jurisdiction Estimating potential emission reductions Understanding e xisting EPA EE/RE SIP guidance Common “getting started” questions and answers

More information on each one of these topics can be found in the appendices.



### Functioning of the Electric System

M any air agencies are already familiar with the electric system, and the role s and responsibilities of energy agencies in their state

. For those who want more information
on the topic, it is provided here

. It is important to understand the workings of t he electric system and to address key issues that arise in energy and air quality planning, most notably quantifying the emission impact s and accounting for the EE/RE policies and programs in SIPs/TIPs (see Appendix I ). T he operation of regional power systems is complex and dynamic, so predicting how these systems will react to new resources

– including EE and RE

– is likewise a complex u ndertaking.

The decision of which EGU to dispatch and in what order is based in principle on economics, with the lowest cost resources dispatched first and the highest cost
resources last. The last resources to be called upon are referred to as the marginal units, which are typically the most expensive units to run. In some cases in certain parts of the country, these plants can also be among the highest emitting and least efficient

EGUs of the power plant fleet.

E E/ R E can affect dispatch in different ways, though both cause marginal units to run less frequently and can result in fewer air emissions. In the case of EE, energy savings occur at the point of consumption

, resulting in a reduct ion in demand on the electric system and a corresponding reduction in emissions from the power plant fleet. In the case of RE, energy savings occur at the point of generation, resulting in a reduction of generation by fossil fuel

- fired EGUs and a correspo nding reduction in emissions from the power plant fuel. (Refer to Appendix B for more information on the electric system.)



### Roles and Responsibilities of Key State Electric Energy Organizations Reaching out to your energy counterparts and explaining the em issions and air quality benefits of EE/RE policies and programs within your jurisdiction is one way to start20

identifying partnership opportunities, common objectives and policy goals. In most cases, the SEOs and PUCs will have information on the state’s ad opted or planned EE/RE policies and programs. The regional planning organizations and sustainability coordinators, within the city or county operations, will most likely have information on adopted or planned local EE/RE policies and programs. Tribal jur isdictions may also have a designated representative that is knowledgeable on EE/RE policy and program

issues.

Building partnerships with energy agencies and organizations within your jurisdiction, prior to and during the SIP planning stage s, can help facilitate information exchange on areas such as: energy impacts of EE/RE policies and programs for required SIP/TIP emission quantification and documentation. To get started, EPA recommends reviewing
the ro les and responsibilities of the followi ng energy

- related organizations: SEOs, PUCs
and Regional Transmission Organizations / Independent System Operators . To assist, Figure 6 lays out w hat they do, the ty pes of policies and programs they oversee and the types of in formation they can provide. T he EPA encourages state, tribal and local agencies to collaborate with these energy expert s to obtain information on their jurisdiction’s EE/RE policies and programs. ( Appendix B provides more information on
the different types of agencies and how they in teract. )



### State, Tribal and Local E nergy Efficiency/Renewable Energy Policies and Programs in Jurisdiction s The following questions can help lead state, tribal and local agencies in the appropriate
direction:

Wh ich EE/RE policies and programs has the jurisdiction adopted? What are the details of those policies and programs in terms of implementation dates, stringency, financial commitments, historic investments in EE/RE and important enforcement features?
Is there a ny information on the energy impacts (projected and/or historical) of those EE/RE policies in terms of energy saved, quantities of RE procured and air emission impacts? Which organization or agency monitors and evaluates the energy impacts of those EE/RE p olicies?

Certain terms are important to understand as state, tribal and local agencies review this roadmap :

EE / RE p olicies are regulations, statutes

, or state public utility commission orders that require parties to acquire EE and/or RE or to commit to funding levels for programs aimed at acquiring EE/RE. Policies can include Renewable Portfolio Standards (RPS) and Energy Efficiency Resource Standards (EERS).

EE program s are designed to increase adoption of energy efficient technologies and practices in particular end

- use sectors through education and outreach,21 financial incentives, financing mechanisms, and/or technical or deployment

assistance. Such programs are frequently implemented in support of mandatory

state

- level policy goals ( e.g., an EERS).

RE program s are designed to increase the production and use of RE sources through resource procurement and development, education and outreach, financial incentives, and/or technical assistance. Such programs may be implemented in support of mandatory state

- level policy goals (e.g., a n RPS), or may be for other purposes (e.g., voluntary purchases of RE ).



### Estimating Potential Emission Reductions After a jurisdiction determines what state, tribal and local EE/RE policies and programs are in place and gathers information on their energy impacts, EPA recommends air quality professionals conduct an initial calculation of potential emission benefits

. Estimating the potential emission reductions allows a jurisdiction to determine whether further investigation is warranted.

Appendix I describes four different emissions quantification approaches for EE/RE policies and programs . Three of these quantification approaches could help with performing back

- of

- the

- envelope calculations of potenti al emission reductions of EE/RE policies and programs. Having a sense of the emissions impact of a policy or program will help a jurisdiction decide whether and how to move forward with incorporating an EE/RE policy or program in a SIP/TIP.



### Understanding Existing EPA Energy Efficiency/Renewable Energy SIP
Guidance
The EPA has issued five guidance documents related to incorporating EE/RE programs in SIPs. Appendix C provides highlights of the parts of those documents relevant to EE/RE and SIPs. State, tr ibal and local agencies should gain a basic understanding of EPA’s existing guidance (and this roadmap ’s clarifications) before deciding on which pathway or pathways to pursue for its policies and programs.



### Common “Getting Started” Questions and Answers

The EPA has also identified important EE/RE policy and program frequently asked questions state, tribal and local agencies could ask when determining wh ether to incorporate the emission impacts of EE/RE policies and programs in a SIP /TIP

. Table 1 includes several “getting started” questions and answers to help state, tribal and local agencies address some basic issues

.22 Figure 5 : Energy Efficiency/Renewable Energy Pathway Flow c hart for State and Tribal Implementation Plans23 Figure 6 : Energy Organiza tions’ Roles and Responsibilities24 Table 1 : Common “Getting Started” Questions and Answers

Question Answer

With all the other regulatory activities I'm responsible for, why should I take time to consider EE/RE measures? In many cases, state, tribal and local governments have already adopted EE/RE policies and programs for reasons other than air quality improvement. It may be a matter of simply accounting for the emission impacts of these existing initiatives. The EE/RE policies and programs may be able to provide emission reductions, which could include criteria pollutants, toxic air pollutants, and greenhouse gases. Air quality planners will benefit from understanding the full benefits of these strategies

I represent a city government in a
nonattainment area that wants to take credit for locally

- initiated EE measures. The plan for the nonattainment area is a SIP, managed by the state government, not a local plan. What should I first do? One of the first ac tions EPA recommends is to talk with your state environment department to understand its position. The SIP is a State Implementation Plan, so an important first step is to engage the state agency primarily responsible for that plan. Analyses will need to be performed of the expected emission benefits of the measures and any impact on air quality in the nonattainment area. Agreements between local and state government agencies can clearly delineate responsibility for making up any discrepancies that might arise if emission reductions do not occur as expected. Some states may be apprehensive about depending on EE/RE policies or programs for emission reductions in the SIP because, if the reductions fail to materialize, then the state will have to make up the
reductions elsewhere. Is this an issue? Some states have expressed this apprehension. If this is a concern, states can evaluate which SIP pathway can accommodate a jurisdiction’s unique needs. The WOE pathway is also available to reach attainment go als even if reductions fail to materialize. In addition, for the baseline pathway and voluntary measures, if the state finds the EE/RE policy or program is not needed to attain the NAAQS, then action would not be needed to make up the
shortfall.

Are dail y emission reductions from electric sector EE/RE SIP initiatives typically small? The jurisdictions that have requested SIP credit in a nonattainment area have typically claimed less than 1 ton/day of nitrogen oxides (NO

x ) credit for an ozone SIP.

However , EPA is aware of some state proposals that would seek multiple tons/day of NO

x credit. The magnitude of emission reductions depends on the aggressiveness of the EE/RE policy or program and its effects on EGU emissions. The EPA encourages state and
local governments initially to review more aggressive EE/RE policies and programs so that jurisdictions can capture the largest benefits first.25 Question Answer

How much effort does it take to complete
the technical documentation to account for emission impacts of EE/RE policies and programs in SIPs/TIPs? It varies depending upon a number of factors, including which EE/RE policies and/or programs state, tribal or local agencies have adopted; the energy data availability; whether the air agency has an established relationship with energy regulators; and the chosen SIP pathway. For example, relatively less effort is needed to fold existing EE/RE policies into a bas eline emission projection analysis. For the emerging/voluntary measures and WOE pathways, documentation is based on a jurisdiction’s desired level of rigor and energy information availability. By contrast, for the control strategy approach, a higher
leve l of documentation and communication with energy regulators is needed and the particular EE/RE provisions
need to be enforceable. We have been designated as a
nonattainment area for ozone and are subject to an emissions budget program
for NO
x . Can we g et SIP credit for EE/RE policies or programs? Yes, SIP credit is available under these circumstances. 11
One acceptable way is by achieving additional emission reductions from EE/RE policies or programs in the presence of this type of program through the retirement of allowances commensurate to the emissions expected to be reduced by the EE/RE policy or program. Another way is to clearly demonstrate that emissions will decrease in the nonattainment area and/or time of interest despite the presence of the e missions cap. 12
Where do you go to find the major steps to proceed from having a state or local EE/RE policy or program to realizing SIP
credit for such a measure in a SIP revision? The EPA has designed this roadmap to cover the major principles common for each SIP pathway, Figure 5 of this roadmap is provided as a starting point. Depending upon which SIP pathway is pursued, further information on the major steps for each pathway can be found in the roadmap appendices that illustrate the major steps a state, tribal or local agency would take to quantify emission reductions, documentation and other applicable requirements. How do I know which state, tribal or local EE/RE policies or programs may already be
accounted for in a future emissions inventory, which is incorporated in a SIP baseline emissions projection? Appendix E of this roadmap outlines the steps state, tribal and local governments can take to understand what EE/RE polici es and programs are already reflected in the SIP emission baseline projections. First, a state, tribal or local agency needs to know the information source of energy forecast and evaluate which EE/RE policies are affecting the demand and supply assumption s in the energy
forecast.

11 EPA (2004a), pp. 9

- 10.

12 The Agency plans to provide an example of such a demonstration and to further clarify this answer.26 Question Answer

What specific tools are available to enable
me to estimate the kilowatt

- hours (kwh) impacts from various, common EE and RE programs (e.g., green building codes, renewable energy credit purchases, water conservation and water p umping improvements, retrofits of public buildings)? The energy regulators within your state or energy

- related local government offices are normally the people who manage these common EE/RE programs. The EPA encourages you to reach out to your colleagues to understand the tools and methods that are employe d to estimate the energy impacts of specific programs. You can also refer to the following website for general information on this topic. http://www.epa.gov/stat elocalclimate/state/activities/me asuring

- savings.html

. How can I specifically estimate the magnitude of kwh reduced (and emissions reductions) from each EGU that supplies the geographic area where the EE/RE policies and programs are being implemented? Examples supplied in Appendix K of this roadmap discuss this methodology. An energy model such as a dispatch modeling has the capability of performing this type of analysis. Performing a regional analysis is the best approach for this situation because t he electricity suppliers generally cross state boundaries to meet the demand or reduce demand when EE/RE programs are brought onto the electric grid in a particular area.27



### SECTION 3.0: DECISION

- MAKING FOR NAVIGATING THE FOUR
PATHWAYS After completing the initial tasks identified at the top of the EE/RE Pathway Flowchart (Figure 5), the next activity EPA recommends is exploring which of the four pathways described above represents the most appropriate mechanism for incorporating a juris diction’s EE/RE policies and programs in their SIP/TIP. The purpose of this section is to help state, tribal and local agencies with this task by navigating through the decision

making flowchart

.

To use the flowchart, jurisdictions need to understand certain definitions contained in the EPA’s 2004 guidance 13 and for federal enforceability :

An emerging program does not have the same high level of certainty as traditional measures for quantification purposes . ( Traditional measures are generally thought of as control measures applied to stationary industrial sources
that can take the form of emissions limitation s .)

A voluntary program is not enforceable against an individual source or implementing party.
Federal e nforceability refers to the fact that in the SIP planning process when EPA approves a SIP control strategy submitted to it for review , the SIP becomes federally enforceable, which provides EPA with authority to ensure the SIP is implemented. Once EE/RE policies and programs become federally en forceable

, EPA has the aut hority under the CAA to apply CAA

- authorized penalties against
the noncompliant party

.



### Decision

- Making Flowchart
The EPA has identified certain key EE/RE policy/program characteristics agencies should
address when determining whi ch pathway they can pursue to account for the emission impacts of EE/RE policies and programs in a SIP or TIP

. State, tribal and local agencies can apply these characteristics to their unique situation s and needs. As additional aids, for each pathway Figure 7 provides characteristics of policies and programs that would
suit each approach and Table 2 contains e xamples of EE/RE policies and programs for
the f our p athways.

Five key questions will aid jurisdictions in determin ing what SIP pathway(s) to p ursue for
each EE/RE policy or program, or group of EE/RE polic ies or program s:

1) Does the jurisdiction have emerging or voluntary programs? 2) If the answer is “yes,” then does the jurisdiction want SIP/TIP credit under EPA’s emerging/voluntary measures polic y ?

13 EPA (2004a, 2004b).28 The term “SIP/TIP cr edit” means emission reductions achieved by using technologies or strategies, used by a state or tribe for the purpose of meeting emission reduction requirements in its reasonable further progress (RFP 14 ), attainment or maintenance strategy. 3) If the answer is “no,” then d oes the jurisdiction want a federally enforceable control strategy? 4) Are the EE/RE policies and programs “on the books” (i.e., already adopted by a legislative or regulatory body ) ? If the policies and programs are not “on the books,” then the logical assumption is whe th er the jurisdiction has EE/RE policies and programs that are “on the way” to being adopted prior to SIP submittal to EPA. 5) Does the jurisdiction have access to emissions projection modeling or can it perf orm baseline emissions projections itself?

State, tribal and local agencies can do a combination of any

, or all, of the four pathways. They should proceed through the steps in the flowchart in Figure 5 for each separate policy and program in their jurisdiction so that they evaluate each policy and program separately.

Whether a jurisdiction has emerging and voluntary measures serves as the entry point question into the decision

- making flowchart. The next two sections describe the possible scenarios that can result from whether the answer to this question for a specific policy or program is “yes” or “no.”



### Pathway s for Jurisdiction s That Have Emerging and/or Voluntary
Measures If a jurisdiction has EE/RE policies and programs that meet the emerging and/or voluntary measures definition and wants SIP/TIP credit for the emission reductions

, then it should consider the emerging/voluntary measures pathway

. If it does not choose that pathway, but nevertheless wants to reflect the emissions reduction benefit of its EE/RE policies and programs in its SIP/TIP, then the WOE pathway wo uld be the appropriate option.



### Pathway s fo r Jurisdictions That Do Not Have Emerging and/or Voluntary Measures If a jurisdiction does not have EE/RE emerging and/or voluntary programs, then it can
consider at least two or three of the other pathways. The first important question is
whether or not the jurisdiction wants the EE/RE policy or program to be a federally

14 Under the Clean Air Act, t he term "reasonable further progress" means such annual incremental
reductions in emi ssions of the relevant air pollu tant as are required by t he CAA or may reasonably be required by the Administrator for the purpose of ensuring attainment of the applicable NAAQS by the applicable date. In previous guidance, when referring to SIP requireme nts EPA also referred to rate of progress or ROP, which was intended to cover a portion of emissions needed to satisfy reasonable further progress. In this guidance, EPA has dropped the ROP term and is now referring to the reasonable further

progress requ irement only as RFP.29

enforceable control strategy. If the answer is “yes

, ” then the control strategy pathway would be the recommended option. If the answer is “no

, ” then the next decision point hinges on wh ether the jurisdiction has access to emiss ions projection modeling or can perform the baseline emissions projections itself. If the answer is “yes

, ” EPA recommends that “on the books” policies and programs be accounted for in the baseline emissions projec tion pathway . If the answer is “no”, then EPA recommends the WOE pathway

.



### Additional Resources
Table 3 contains summary information on SIP credit for each p athway, including appropriate pe rcentage of SIP “credit,” s uggested quantification methods and rele vant EPA guidance. It also includes suggested emission quantification approaches state, tribal and local agencies can use as guidelines when accounting for emission impacts of EE/RE policies and programs within a certain SIP/TIP pathway. These approaches are suggestions only, so a jurisdiction can choose to use an alternative approach, not listed here, that has comparable rigor and emission results. Before getting too deeply into any EE/RE emissions analysis, contact the air program in an EPA regional of fice 15 to discuss options for emission quantification approaches that are appropriate for the EE/RE policies and programs at hand.

15 For more information, go to: http://www.epa.gov/aboutepa/where.html

.30 Figure 7 : Characteristics of Policies and Programs Suitable for Each Pathway31

Table 2 : Examples of Energy Efficiency/Renewable Energy Policies and Programs for the Four State and Tribal Air Planning Pathways 16

Policies Programs
Baseline Emissions Projection Pathway Existing policies such as:

Renewable portfolio standards Energy efficiency resource standards
Public benefit funds Not applicable

Control Strategy Pathway New policies (or proposed increases in stringency for existing policies) with respect

to: Renewable portfolio standards
Energy efficiency resource standards
Public benefit funds Not applicable

Emerging/Voluntary Measures Pathway New or existing policies such as: Mandatory commercial whole

- building energy use disclosure at time of sale or
lease

On

- bill financing for EE retrofits New or existing programs such as: Development and implementation of municipal energy conservation plan Municipal building retrofit programs Statewide EE awareness program Customer feedback on energy usage Weight of Evidence Pathway

New or existing policies such as: Renewable portfolio standards Energy efficiency resource standards

Public benefit funds Mandatory commercial whole

- building energy use disclosure at time of sale or
lease New or existing programs such as: Development and implemen tation of municipal energy conservation plan Municipal building retrofit programs Statewide EE awareness program Customer feedback on energy usage

16 Example policies are provided here for all four pathways. Generally, because of their larger scope, EE/RE policies have the potential to provide greater emission reductions than programs. By contrast, EE/RE programs are frequently implemented in support of mandatory state

- level policy goa ls and individually have the potential to achieve smaller emission impacts. Example programs are provided for only two of the four pathways

– the emerging/voluntary measures and WOE pathways. Example programs are not provided for the baseline emissions p rojection and control strategy pathways because they are not anticipated to provide enough potential emission reductions to warrant the time and resources necessary to satisfy the SIP documentation needs of each of those pathways. However, jurisdictions ca n decide if this is true in their unique circumstances. Reviewing the resources needed can help provide the context for EE/RE policies and programs as jurisdictions consider which SIP/TIP pathway is appropriate for each of its EE/RE policies and programs.32

Table 3 : Information on State and Tribal Implementation Plan Credit and Quantification Approaches

Percentage of SIP “Credit”
Allowed Suggested Quantification
Methods Relevant EPA Guidance

Baseline Emissions Projection Pathway

No SIP credit limit Allows for jurisdictions to account for established EE/RE policies in the SIP Energy model approach Historical hourly emission rate approach

Alternative emissions projection tools or analysis More information on IPM is
available at http://www.epa.gov/airmarkt/epa

- ipm/ “EIIP, Emissio ns Projections Volume X”, EPA, http://www.epa.gov/ttnchie1/eiip /techreport/volume10/x01.pdf

, 1999 Control Strategy Pathway

No SIP credit limit Need to present case for
credit Energy model approach Historical hourly emission rate approach Capacity factor approach “Guidance on SIP Credits from
Emission Reductions from Electric

Sector Energy Efficiency and Renewable Energy Measures,”
EPA, http://www.epa.gov/ttncaaa1/t1/ memoranda/ereseerem_gd.pdf

, August 2004 Emerging/Voluntary Measures Pathway Presumptive limit is 6 percent
of the total amount of
emission reductions required for SIP purposes Limit applies to the total
number of emission
reductions that can be claimed from any combination of emerging and/or voluntary measures Can be greater than six percent where a clear and convincing justification is
made Capacity fa ctor approach “Incorporating Emerging and Voluntary Measures in a State Implementation Plan (SIP),” EPA, http://www.epa.gov/ttncaaa1/t1/ memoranda/evm_ievm_g.pdf

, September 2004
“Guidance on Incorporating
Bundled Measures in a State Implementation Plan,” EPA, http://www.epa.gov/ttn/caaa/t1/ memoranda/10885guideibminsip. pdf , August 2005

Weight of Evidence Pathway

No SIP credit limit Only an option if the predicted air quality value in
the attainment demonstration (using modeling) is within a prescribed margin of attaining the NAAQS Energy model approach Historical hourly emission rate approach Capacity fac tor approach

eGRID sub region non

- base
load emission rates “Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of Air Quality Goals for Ozone, PM 2.5

, and Regional Haze,” EPA, http://www.epa.gov/ttn/scram/gu idance/guide/final

- 03

- pm

- rh

guidance.pdf , April 200733 

## Baseline Emissions Projection Pathway

For an understanding of existing baseline

pathway guidance
See Appendix C.2

For information on the baseline pathway

See Appendix E 

### SECTION 4 .0: BASELINE EMISSIONS PROJECTION PATHWAY When developing a SIP/TIP, jurisdictions must have an inventory of current emissions
and a baseline projection of future emissions. The baseline emissions projection shows
the level of emissions in the future target year that will resu lt if no additional control strategies, policies or programs are implemented. The
baseline emissions projection includes effects of existing federal

, state, tribal or lo cal policies or programs that will come into effect by the future attainment year, but does not include any additional (“on the way”) strategies not yet in statute or codified by a regulatory body. These strategies can include

case s where a local community

want s to capture local EE/RE SIP measures that are not part of federal or s tate

regu lations or statutes . The EPA will consider the concept of a s tate entering into a binding commitment with a community in order to capture such reductions within the baseline emissions projection pathway.

J urisdictions can take steps to understand the impacts of their existing EE/RE policies and programs, and to represent these impacts in baseline emission projections

. State,
tribal and local agencies interested in accounting for “on the books” EE/RE polici es in the baseline emissions projections pathway can conduct their own analysis or us e EPA’s emissions projections of the EGU sector. Appendix E provides details on incorporating “on the books” EE/RE policies in the SIP/TIP baseline pathway and on impl ementing this pathway. Agencies interested in EPA’s energy modeling capability (using the IPM model) to account for EE/RE policies in their
baseline emission projections can start by reviewing Appendix E.2

. State, tribal and local34 Baseline Emissions Projection Pathway:

Qualifying Criteria

• State, tribal and local agencies can include a specific EE/RE policy in the future SIP/TIP attainment year emissions baseline if:

• It has already been adopted by a governing body in a jurisdiction AND

• The effects of the policy have not already been accounted for in the SIP/TIP (no double counting). agencies considering developing their own method can also review Appendix J which describes the methodology EPA used to develop energy savings estimates for state EE/RE policies, provides an overview of the information EPA is making available and outlines potential uses for th e information.



### Qualifying Criteria

Certain qualifying criteria have to be met in order to include a policy in the future
baseline attainment year. First, EE/RE policies in the baseline need to be mandatory policies adopted by a governing body in a juri sdiction . For example, EERS that have been adopted in law can be included in the baseline emissions forecast. However, if a state, tribal or local agency is currently discussing whether to adopt such a policy, or has proposed but not yet adopted one, the n it is not appropriate to include. Voluntary EE/RE p olicies

– where there is no regulatory obligation

– are likewise ineligible.

Second, EPA wants to ensure that the emission reductions from EE/RE policies are not
counted twice. Prior to adjusting the baseline emission projections, state,
tribal and local agencies must clearly understand which EE/RE policies and programs are already assumed in the
baseline . Likewise, any EE/RE policies accounted for in the
baseline cannot be incorporated in any oth er SIP pathway.



### Mandatory Policies T hat A re N ot Federally Enforceable

E E/RE policies incorporated into the baseline emission projections are not federally
enforceable and the EPA may not bring an enforcement action if a state fails to implement such an initiative. However, i f the state, tribal or local air agency is relying

on the EE/RE policy in the baseline to help the area attain a NAAQS and the EE/RE policy is not implemented as assumed and air quality does not improve so as to meet the
NAAQS as ant icipated in the SIP/TIP

, then the jurisdiction may be required to implement backup policies to make up for the emissions shortfall . The air agency might also agree voluntarily t o revise their SIP . Alternatively, EPA may initiate a SIP call under section 110
of the CAA in which EPA can require that the state revise the SIP to make up the

emissions relied upon to meet the applicable NAAQS. In addition, state public utility commissions typically hav e mechanisms to require compliance with state EE/RE policy requirements, including financial incentives for exceeding state policy requirements and penalties for non

- compliance. These enforcement mechanisms can provide more certainty that EE/RE policy req uirements will be achieved.35 

## Control Strategy Pathway

For an understanding of existing control measure pathway guidance
See Appendix C.3

For information on the control strategy

pathway
See Appendix F 

### SECTION 5 .0: CONTROL STRATEGY PATHWAY

S IPs and TIPs include strategies containing control measures to provide emission
reductions to enable nonattainment
areas to attain and meet SIP requirements. The control strategy

p athway would provide state, tribal and local agencies the opportunity to include EE/RE policies as part of a control strategy. It is best suited for a state, tribal or local agency that is contemplating adopting EE/RE policies
before submit ting its SIP to EPA (“on the way” policies) and whose emission
benefits will be realized coincident with the planning timeframe of its SIP. The control strategy pathway offers the most visible and direct benefit in the SIP context

, is federally enforceable and represent s the pathway taken when an agency adopts a traditional control measure into a SIP/TIP (e.g., a control measure for a stationary source).

This pathway involves significant
documentation and quantification
efforts . State, tribal and local agencies that undertake the control strategy option have to provide a demonstrat ion that the
emission reductions resulting from their mandatory EE/RE policies are permanent, enforceable, quantifiable and surplus . This roadmap clarifies how those requirements can be

sat isfied

. A s better information
about the su c c ess of these policies
and programs become s available, EPA believes that it will be feasible for air agencies to make the necessary demonstration to address the requirements in their SIPs/TIPS

. 

### Control Strategy Pathway Must Meet Four Criteria

Bec ause the control strategy pathway is federally enforceable, coordination issues could
be significant . The state, tribal or local air quality office will most likely need to reach
out to the state p ublic u tility c ommissio n and others to explain the implications of making the state, tribal or local agency’s mandatory EE/RE policies federally
enforceable.36

Additional details about this pathway are included in Appendix F. Appendix F contains
information on four criteria that have to be met and how a state, tribal or local agency can satisfy them (see Figure 8 ). The strategy must be permanent throughout the term for which the credit is granted unless it is replaced by another measure or the state demonstrates in a SIP rev ision that the emission reductions from the measure are no longer needed to meet applicable requirements. The strategy must be federally enforceable and its emission reductions must be quantifiable and include procedures to evaluate and verify over time t he level of emission reductions actually achieved. The
emission reductions must be surplus and not double counted.

With respect to quantifying the benefits of m andatory EE/RE policies, t he approach es outlined in Appendi x I reflect that some state, tribal and local agencies (or groups of state, tribal and local agencies) will possess the resources and capability to perform sophisticated modeling analyses of the energy and air benefits of mandatory EE/RE policies, while others will not. Appendix I contains four quantification approaches that range in so phistication and describes how to handle uncertainty, including which approaches would be appropriate for the control strategy pathway.

Permanent

• Evidence that regulation or legislation is mandated throughout
attainment planning period Enforceable

• EPA has ability to enforce EE/RE policies and programs brought into SIPs as control strategies

• Federal enforceability is key for expanded SIP credit Quantifiable

• Use a reliable and replicable emissions quantification approach that illustrates which EGUs will reduce emissions based on EE/RE policies and

programs Surplus

• Document no double counting of
emissions reductions

• Demonstrate emission reductions are not used for other CAA requirements (e.g., under a cap and trade program) Figure 8 : Four Criteria the Control Strategy Pathway Must Meet37 

### Emerging/Voluntary Measures

Pathway

For an understanding of existing voluntary/emerging measures pathway guidance

See Appendix C.4

For information on the voluntary/emerging

measures pathway
See Appendix G 

### SECTION 6 .0: EMERGING/VOLUNTARY MEASURES PATHWAY

In the 2004 guidance, 17 EPA recognized that many jurisdiction s o f the country had implemented most available

, traditional emission control strategies and wanted to try new types of pollutant reduction strategies to attain NAAQS, including emerging and voluntary EE/RE programs. The EPA supports and encourages the testi ng of emerging and voluntary pollutant reduction strategies. An emerging measure is a measure or strategy that does not have the same high level of certainty as traditional measures for quantification purposes. A voluntary measure is a measure or strateg y that is not enforceable against an individual

emissions source or a party responsible for implementing the EE/RE activity . A measure can be
both emerging and voluntary. These measures can be state initiatives, but are generally locally

- based initiative s , that are designed to encourage or require citizens, businesses or local government to reduce emissions

.

In addition, the individual emerging and/or voluntary measure can be "bundled" in a single SIP submission. The
emission reductions for each measure in the bundle would be quantified and the
total reductions would be summed together in the SIP submission. After SIP approval, each individual measure would be implemented according to its schedule in the SIP. It is the performance of t he entire bundle (the sum of the emission
reductions from all the measures in the bundle) that is considered for SIP evaluation purposes, not the effectiveness of any individual measure. 18

This pathway is similar to the control strategy pathway in that an EE/RE program can receive emission reduction SIP credit. For emerging/voluntary stationary measures, the presumptive SIP credit limit is 6 percent of the total amount of emiss ion reductions required for RFP , attainment or

17 EPA (2004b).

18 These measures can be bundled with non

- EE/RE measures.38

maintenance demonstration purpose s. 19 These measures must satisfy the four criteria
for SIP measures:

Permanent
Enforceable Quantifiable Surplus

T he 2004 guidance provides flexibility for emerging measures on the quantifiable criterion and for voluntary measures it provides flexibility on the enforceable criterion.

The pathway is well suited for jurisdiction s that have emerging and/or voluntary EE/RE policies and programs that are not easy to enforce and/or quantify but for which the jurisdiction would like SIP credit

. The pathway establishes conditions that limit the credit that emerging / voluntary measures can receive. (See Table 3 for details on how much SIP credit is allowed under this pathway compared to other pathways.) The emerging/voluntary measures pathway provides a mechan ism that allows state, tribal or local agencies to receive provisional emission reduction credit in their SIP for new emission control and pollutant reduction strategies that have the potential to generate additional emission reductions or air quality bene fits. Provisiona l emission reductions or pollutant reduction strategies can become permanent when post

- implementation
evaluations validate the amount of emission reductions achieved.

19 EPA (2004b).39 

### Weight of Evidence Pathway

For an understanding of existing WOE pathway guidance
See Appendix C.5

For information on the WOE measures

pathway
See Appendix H 

### SECTION 7 .0: WEIGHT OF EVIDENCE PATHWAY

When state, tribal and local agencies prepare SIP /TIP demonstrations of attainment, sometimes air quality modeling results can be inconclusive and predict that jurisdiction s

may not attain a NAAQS based solely on air quality modeling. In those cases, EPA guidance allows sta te, tribal or l ocal agencies to submit WOE demonstrations to show that, despite inconclusive modeling results, the nonattainment area will still attain
based on other evidence. The WOE pathway can reflect mandatory and voluntary EE/RE policies and programs
that dem onstrate, through objective analysis

, which emission reductions will occur within the same planning timeframe as that
used for attainment.

The WOE pathway is applicable where a state, tribal or local agency has prepared an attainment demonstration that includes modeling that results in projected future air quality that is close to the NAAQS, but does not meet the level of the NAAQS. In this case, an agency may choose to submit a WOE analysis

, which may
include

, among other things

, alternative modeling results, emissions controls that were not modeled, and ambient data trends and analyses. As part of th e WOE showing, the

agency may wish to ta ke advantage of EE/RE policies or programs adopted in its jurisdiction for purposes other than the SIP/TIP. The y may want to reflect the emission benefits of the policies or programs in the determination because they believe that the positive benefits wil l potentially affect air quality in the attainment year, but modeling the impact of the policy or program is
either too resource intensive or not
feasible for other reason s or the jurisdiction is not interested in SIP /TIP
credit

.

Agencies need to perform objective analyses of the benefits expected from the EE/RE programs and policies reflected
in the WOE demonstration that are
intended to help improve air quality in the nonattainment area in question. The
more robust the analysis supporting the

WOE demons tration, then the stronger
the argument that the area will attain despite inconclusive air quality modeling results. The WOE demonstration can be strengthened in several ways, including obtaining

c ommitments from SEO or PUCs that the EE/RE policy or program requirements are approved or will be in place for the duration of the attainment plan

. Process issu es40

associated with this pathway can be more or less significant , depending on the extent of the supporting analysis

.

W OE demonstrations are gener ally a set of analyses of air quality, emissions, meteorological data, and modeling data that state, tribal and local agencies can use to show that attainment of a NAAQS is likely, despite initial modeled results that may not show attainment or may be clos e to the level of the NAAQS. The greater the difference between the modeled design value and the level of the standard, the more compelling the additional evidence produced by analyses must be in order to conclude (based on the WOE results) that attainmen t is likely despite the inconclusive modeled attainment

test. W OE demonstrations are described in guidance EPA has issued on their use in SIP
attainment demonstrations. 20 The EPA guidance includes guidelines for assessing when corroborating an alyses and/o r WOE determinations may be appropriate.

Emission reductions from mandatory EE/RE policies and voluntary programs proposed for use in the WOE demonstration cannot be used elsewhere in the SIP. In other words, no double counting is permitted. In additi on, the measures must be in place for the duration of the SIP planning period. Appendix H describes the WOE approach in more depth and provides information on WOE analyses and Appendix K provides two example s of state s that incorporated EE/RE policies and programs in their SIP WOE
demonstrations

.

20 EPA (2007).41



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